Starting tomorrow, a new middle-class tax cut will take effect across Canada, offering families a break on their taxes. Prime Minister Mark Carney confirmed today that the tax cut will save two-income families up to $840 annually, benefiting 22 million Canadians. The government’s aim is to reduce costs for households, making life more affordable, especially in the face of global economic challenges.
This tax change will lower the income tax rate by one percentage point for the remainder of 2025, from 15.5% to 14.5%. In 2026, the rate will drop further to 14%. The majority of savings will go to those in the lowest income brackets, with nearly half of the relief targeting individuals earning less than $57,375. Pay administrators have already updated tax tables, meaning that workers will see their reduced tax withholdings starting July 1. For those not seeing immediate changes, the relief will be reflected when they file their 2025 tax returns in 2026. The government sees this tax cut as an important step toward building a stronger, more equitable Canadian economy.
